Apparently, the acts in Otherworld, pertaining to the Otherselves, have the following effects in the 2012 anime:
Otherselves represent a 'girl, you have issues' state. With more prominent ones being apparent indication of intensity of internal world. Successful attacks represent being subjected to emotional stress.
Killing an other self, as stated by Strength-as-Yuu in episode 5, will destroy all of the grief held by the real counterpart, but will also destroy said person's attachments, or love. However, the person will be subjected to pain in the future, with no assistance. It is also possible to get some of these memories back by focusing on them.
Creation of a domain in Otherworld, like Kagari/Chariot had, and like Yomi/Dead Master did, corresponds to snapping, going off the deep end to the La La Land.